Recruitment acronym round-up: IR35 and RPO

October 4th, 2022 | Industry News

Now that the UK has a new Prime Minister, recruitment agencies, employers and contractors are all exploring what her promises on IR35 might deliver. IR35 – the UK’s anti-avoidance tax legislation prevents ‘disguising’; employment by taxing it at a similar rate to employment. An inside-IR35 decision requires contractors to be classed as employees for all tax purposes including PAYEand National Insurance, whilst an outside-IR35 contractor can be taxed as an off-payroll worker.

Web based recruitment software in the UK often contains tools to help recruiters master the complexities of IR35, and the legislation is often seen as flawed, especially where contractors are concerned. One major concern is that the burden of deciding if a contractor is inside-IR35 or outside-IR35 has been transferred to employers, adding an extra administrative burden.

RPO

Recruitment Process Outsourcing or RPO is the process of outsourcing the entire recruitment function to third party. It offers several advantages:

• Scaleability – a small organisation can call on specialist services, such as recruitment agency
  software, without having to make that investment itself.
• Specialisation – recruitment service providers are experts in their field so they can find and assess candidates more effectively.
• Speed – it’s claimed that 60% of candidates have withdrawn from a hiring process because it’s
  taking so long. Recruitment management software can speed up the process and also helps employers to undertake employment tasks swiftly.
• Agility – allied to speed, but different, agility allows a recruiter to adjust to new circumstances (like COVID-19) and to pivot activity so that recruitment gaps are filled effectively.
• Bespoke service – because the RPO process is flexible, the recruitment agency can tailor it to
  the employer; taking on more tasks or fewer, giving more advice or less, depending on the capacity of the employer to engage in recruitment activity. SaaS recruitment agencies can also offer online support, making it possible for SMEs to handle routine tasks at times that work for them.
• Candidate pools – a well-resourced recruiter has a large pool of passive candidates that they’ve cultivated over time, which means that employers can call on a much greater range of talent than is available through classic routes like advertising.
• Brand communications – paradoxically, a recruiting consultant can often ‘sell’ a client’s brand better than they can themselves because they are able to give a clearer and more balanced opinion as to why this is the right employer for the candidate.